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Old 05-30-2007, 03:12 PM
 
Location: Atlanta
738 posts, read 644,343 times
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OK, this ought to be interesting. How much do you think you'll need in savings to retire?
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Old 05-30-2007, 03:15 PM
 
16,092 posts, read 36,583,468 times
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I used to think $3-5 million - but as I approach the actual time of my intended 'early' retirement in 5-10 years, I'm hoping my money will double by the rule of sevens!
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Old 05-30-2007, 07:12 PM
 
Location: Las Vegas
13,890 posts, read 25,331,777 times
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It depends on the lifestyle you want. I don't need as much as some because I don't live extravagantly. Also depends on what is provided by other means. I didn't have to save as much because I have a pension and health insurance. I'm also old enough that I should still get something from social security.

I'm one of the lucky ones and I know it. I worked hard and I planned to retire at 50. So far no luck because I can't sell my house. After I move, I will still work. I will do something I want to do.
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Old 05-30-2007, 09:01 PM
 
Location: Oregon Coast
1,848 posts, read 6,250,017 times
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I don't think it's a matter of one large lump sum. At least that's not the way it'll work for us.
I have read where they describe retirement money as a 3 legged stool but for us it'll have more legs. We'll have 2 pensions,an investment 401k,home equity,plus social security.
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Old 05-30-2007, 09:39 PM
 
Location: Bayside, NY
823 posts, read 3,375,218 times
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I prefer having my money invested and making money for me rather then in savings.

Many finance experts recommend you have an emergency fund of anywhere from 6 months to 2 years.

I think you have to be retired for a few years before you know what your true living expenses are and then you will know how much you need for the rest of your life.
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Old 05-30-2007, 10:01 PM
 
Location: WA
5,395 posts, read 21,401,588 times
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You must have a budget or planned expense level to know what you need to retire.

Leaving SS and Medicare out of the discussion, one theory is you need enough saved so that 4% of your savings covers your annual expenses (this assumes your savings can be invested to earn 7% so that there is a 3% inflation pad). So, if you can cover your expenses (including medical and taxes) with $100,000 a year, you should be able to retire on a nest egg of $2.5 million or 25 times your annual budget.

Many will receive SS, Medicare, and or some pension that will reduce the amount you need to save. Also consider than most people have lower expenses as they get older, lower taxes, and no need to save.

In reality most will get by with less savings than the recommended 20 to 25 times annual income, but without a good budget you won’t know. So if you are just guessing it will be at least 15 times your annually salary.
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Old 05-31-2007, 01:47 AM
 
Location: san francisco bay area
300 posts, read 1,746,326 times
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I have been working with a financial planner for 5 years now. My financial planner, spouse, and I have determined that we could retire now although we probably will work another 4 years. In addition to my spouse's retirement--a defined benefit pension plan--and my TIAA/CREF retirement, we have saved an additional 2 million dollars upon which we can draw. In addition to this money, we both have have paid into social security and will collect it once we reach 66 (he will turn 66 two years before I do). We will be selling a rental home that we own in the Northeast, doing a 1031 exchange on this property purchasing an apartment in a southern city and a house on the beach, relocating to that city and making those 2 houses our permanent residence. Then we plan to sell our house in the SF Bay Area on which we have no mortgage and invest that money into our portfolio. So when we retire we will have an apartment in the city, a house by the Gulf, both completely paid for, and no mortgages. We've estimated that with my husband's pension, my TIAA/CREF, drawing 5% of our savings, and later our social security, we will easily have an income of 100,000.00+ per year. And based on our calculations, if we both lived to 95, we would still have sizable portfolio left for our legatee or beneficiary or to give to charity.
My spouse and I have lived frugally, saved and invested our money and are confident that we will more than enough to live on when we retire.
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Old 05-31-2007, 02:21 AM
 
3,853 posts, read 11,668,446 times
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Quote:
Originally Posted by nooneknowsmyname View Post
I have been working with a financial planner for 5 years now. My financial planner, spouse, and I have determined that we could retire now although we probably will work another 4 years. In addition to my spouse's retirement--a defined benefit pension plan--and my TIAA/CREF retirement, we have saved an additional 2 million dollars upon which we can draw. In addition to this money, we both have have paid into social security and will collect it once we reach 66 (he will turn 66 two years before I do). We will be selling a rental home that we own in the Northeast, doing a 1031 exchange on this property purchasing an apartment in a southern city and a house on the beach, relocating to that city and making those 2 houses our permanent residence. Then we plan to sell our house in the SF Bay Area on which we have no mortgage and invest that money into our portfolio. So when we retire we will have an apartment in the city, a house by the Gulf, both completely paid for, and no mortgages. We've estimated that with my husband's pension, my TIAA/CREF, drawing 5% of our savings, and later our social security, we will easily have an income of 100,000.00+ per year. And based on our calculations, if we both lived to 95, we would still have sizable portfolio left for our legatee or beneficiary or to give to charity.
My spouse and I have lived frugally, saved and invested our money and are confident that we will more than enough to live on when we retire.
lol, 100,000+ year at retirement is definitly living the good life. You could go on vacation practically every month!

The way I look at it. You should save as much as possible for retirement and just learn to live within that much money when you retire. Just make sure you save enough so you don't have to work. That will really screw up your retirement if you end up working a PT job at your old age.
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Old 05-31-2007, 07:24 AM
 
Location: Bayside, NY
823 posts, read 3,375,218 times
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We have an estimated budget for when we retire and I have cushioned it with an extra $2000 a month for unknowns. My wife's retirement package includes our medical & drug plan for which we pay a nominal amount plus I receive a small pension and we will both be drawing social security. At this point it doesn't look like we will have to tap into our investments to supplement our living expenses.
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Old 05-31-2007, 10:37 AM
 
Location: san francisco bay area
300 posts, read 1,746,326 times
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Quote:
Originally Posted by killer2021 View Post
lol, 100,000+ year at retirement is definitly living the good life. You could go on vacation practically every month!

The way I look at it. You should save as much as possible for retirement and just learn to live within that much money when you retire. Just make sure you save enough so you don't have to work. That will really screw up your retirement if you end up working a PT job at your old age.
I completely agree about saving as much money as possible for retirement. That's exactly what we did. And as far as working during retirement, since we both work in higher education--he as a community college instructor and I as a university professor--we could teach part-time 1 or 2 courses per year if we wanted to supplement our income, which at this point we know we won't need to do. But we still might teach part-time just to keep our minds in the intellectual game.
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